What else?

Statutory Instrument 2024 No. 839 (L. 11) amended the Civil Procedure Rules (CPR), taking effect from October 2024. And guess what? Those changes are already being reflected in caselaw.

What changed in the CPR?

Let’s start at the beginning. Rule 1, our dear friend the Overriding Objective of the court. This determines that a court will ‘deal with cases justly and at proportionate cost’[1]. These amendments added a new sub paragraph to say that one way of dealing with a case justly is ‘promoting or using alternative dispute resolution’[2]. That, in and of itself, is significant, but not if it’s alone. Thankfully, it is not alone. 

In rule 3.1 the Court’s general powers of case management are listed, and this time the amendments says the Court may ‘order the parties to engage in alternative dispute resolution’[3]. Order mediation. Think about that for a moment. It is now very boldly in the Court’s power to tell litigators to mediate; no one is telling them to settle, just telling them to try.

When we get to the case management powers of the court, it is worth noting that in Rule 28.7(1) there were previously just three areas to be considered in a directions order (disclosure, service of witness evidence, and experts), but now added is consideration of ‘whether to order or encourage the parties to engage in alternative dispute resolution’[4]. The strength of such consideration is a significant change. And again at rule 29.2(1A) ‘When giving directions, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution’. 

The CPR is now ‘promoting’ ADR, it can be ordered, it ‘must’ be considered, and it also must be ‘encouraged’. This is not nothing, this is not just atmospheric change.

And then we get to costs …

Statutory Yes, the CPR has updated here too. We all have perfect vision with our hindsight specs on (or do we?) so what could need changing here? Rule 44 is generally about costs and 44.2 in particular looks at the extent of the Court’s discretion. The conduct and reasonableness of the parties is examined, the nature of the pursuit of the litigation and whether exaggeration played a part in either party’s conduct. It matters that conduct now includes looking at ‘whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution’[5]. Irrespective of what happened in the litigation itself, no one wants to be called unreasonable, or a failure after it’s over. Or maybe you do. But let’s say you don’t, if you aren’t thinking about mediation, you might like to ask yourself why?

[1] Rule1.1(1)

[2] Rule 1.1(1)(f)

[3] Rule 3.1 (2)(o)

[4] Rule 28.7(1)(d)

[5] Rule44.2 (5) (e)

And how are these changes working out?

In these two examples, we see the brilliance of great lawyers on all sides and the court nudging (a term yet to appear in the Civil Procedure Rules, but let’s give it time) in the direction of mediation.

Northamber v Genee World [2024] EWCA Civ 428 was commercial litigation. In October 2021 the Case Management Order included provision that the parties had to consider settling the litigation by means of ADR, and if choosing not to do so the party declining such a suggestion was obliged to serve a witness statement explaining why within 21 days of the invitation. In February 2022 the claimant suggested mediation in correspondence to two defendants, reminding them of the obligations in the Case Management Order: one defendant said they’d take instructions, the other didn’t reply. Mediation never happened. The trial took place in October 2022.

In the cost litigation that followed, the judge said that the offer of mediation was half hearted, and that the lack of response made no difference. Interestingly, on appeal that description was rejected; silence itself was unreasonable, and there was a clear breach of the order requiring them to consider and then serve witness evidence in response to a request for mediation. The court went on, at paragraph 94:

“If breaches of such orders are ignored by courts when deciding costs, parties will have no incentive to comply with them. That would undermine the purpose of making them, which is robustly to encourage parties to mediate”.

Noone likes a pedant (or do they?) but how interesting that mediation is specifically referred to here, not just ‘alternative dispute resolution’.

Next up is a trademark case, (DKH Retail Limited v City Football Group Limited [2024] EWHC 3231 (Ch)) during which the claimant applied for an order for compulsory mediation before the trial. The case of Churchill was mentioned, as were October’s amendments to the CPR, together with the need for court time and resources to be considered. It was the chat about ‘why’ and ‘why not’ that seems to show a momentum in favour of trying; and perhaps that’s the point, no one forces you to settle at mediation, but if there are things you don’t know (about your case or theirs), mediation is a great place to find them out.

Paragraph 33

‘They [claimants] said that the dispute is capable of resolution: it is not a particularly complicated one, and there are several variables in the dispute between the parties which might allow an out-of-court compromise (and which might not be available in a judgment of the court). These include agreement about the form and size of any logo or lettering on the relevant sports kit, payment of money, and the timing of any changes.’

Settlement negotiations had been attempted but had not been successful. The defendants said mediation should only be ordered if there is a realistic prospect of success, which they didn’t consider was available here.

Paragraph 35

‘He [defendant’s counsel] said that, even if the claimants say they are prepared to compromise, the defendant wishes to know once and for all whether it can place the Asahi branding on football kit and other clothing. He said that this needs to be determined and that his client is entitled to a judicial determination of that question. He submitted that mediation was not realistically likely to lead to settlement.’

Mediation was ordered. The case settled before trial.

And to the sceptics …

Are any facts about these cases in the public domain, and do we know the advice given to any of the litigants? No. Thankfully and rightly. But the judgments reflects how blessed we are with the legal system we have and the quality of lawyers practicing in it. They are well prepared on the law and the detail, and they are legally (morally, even) prepared to fight for their cause. 

Is mediation, then, a poor substitute for finishing the job they’ve all started? Is it trying to inch its way into a space it has no place being? Or is there merit in realising that once you know your case, there is value in knowing theirs, and choosing your own path out of a dispute? As the court said in DKH, there are many details that can be considered and agreed at mediation that a court wouldn’t involve itself in.   

But does that beg the even bigger question, should parties in a dispute ditch the lawyers and move straight to mediation? Opinions vary, but - if you’d kindly hold the mediator-is-neutral-hat for a moment - they really (really) shouldn’t. It’s very basic. Any human or company in dispute needs to understand their landscape: they need to know what their options are, what their options aren’t, what room there is to meet their interests, to repair damage and to restore themselves. Without the good, committed lawyers, how could mediation serve their interests? Is it right to risk buyer’s remorse because mediation happened too quickly and in a vacuum of understanding? Again, forgive the partisan view, but of course not. 

But (yes, of course, there is one of those) is it helpful when you have enough knowledge yourself to be able to ask about the ‘unknown unknowns’? Absolutely it is. And in the right setting, the courts know to order it.